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1989 Supreme(Mad) 189
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE NAINAR SUNDARAM, THE HONOURABLE MR. JUSTICE K M NATARAJAN & THE HONOURABLE MR. JUSTICE BELLIE
Tamil Nadu Small Industries Corporation Limited - Appellant
Versus
State of Tamil Nadu - Respondents
Tax Case No. 1294 of 1977
Decided On : 14 March 1989
The appellate authority under section 31 of the Tamil Nadu General Sales Tax Act, 1959 has the power to entertain additional grounds of appeal, even if the assessee did not raise a dispute over the particular turnover in the original grounds of appeal.
Headnote:
TAXATION - SALES TAX - ADDITIONAL GROUNDS OF APPEAL - POWER OF APPELLATE AUTHORITY TO ENTERTAIN - TAMIL NADU GENERAL SALES TAX ACT, 1959, SECTION 31.
Fact of the Case:
The assessee filed an appeal against the assessment order, but did not raise a dispute over a particular turnover in the original grounds of appeal. Subsequently, the assessee filed an additional ground before the Appellate Assistant Commissioner, who refused to entertain it. The assessee then filed a further appeal before the Sales Tax Appellate Tribunal, which also refused to entertain the additional ground.
Finding of the Court:
The court held that the appellate authority under section 31 of the Tamil Nadu General Sales Tax Act, 1959 has the power to entertain additional grounds of appeal, even if the assessee did not raise a dispute over the particular turnover in the original grounds of appeal. The court overruled the earlier decision of the Division Bench in State of Tamil Nadu v. Siemens Engineering and Manufacturing Company of India Limited 1977 (39) STC 285 (Mad.), which had held that the appellate authority did not have the power to entertain additional grounds of appeal.
Issues: Whether the appellate authority under section 31 of the Tamil Nadu General Sales Tax Act, 1959 has the power to entertain additional grounds of appeal, even if the assessee did not raise a dispute over the particular turnover in the original grounds of appeal.
Ratio Decidendi: The court held that the appellate authority has the power to entertain additional grounds of appeal because: * The provisions of section 31 of the Act and rule 27 of the Rules framed under the Act do not expressly prohibit the appellate authority from entertaining additional grounds of appeal. * The powers conferred on the appellate authority under section 31 are very wide and include the power to confirm, reduce, enhance or annual the assessment or the penalty or both, or set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed or pass such other orders as he may think fit. * The proceedings under section 31 are not an ordinary civil litigation and the hearing of the assessing authority is only for the purposes of deciding the tax-payer's liability and it is not a case of one litigant being pitted against another with regard to any private rights involved.
Final Decision: The court answered the reference in favor of the assessee and directed the tax case to go before the Division Bench to be dealt with on merits.
NAINAR SUNDARAM, J.
In this reference, the question that comes up for consideration is as to whether an assessee, who has not raised a dispute over a particular turnover in the original grounds of appeal under section 31 of the Tamil Nadu General Sales Tax Act (1 of 1959), hereinafter referred to as "the Act", could be permitted to raise additional grounds over the same subsequently. The provocation for the reference by the Division Bench, who heard the tax case, was the pronouncement of the earlier Division Bench in State of Tamil Nadu v. Siemens Engineering and Manufacturing Company of India Limited 1977 (39) STC 285 (Mad.). There it was expressed "there was no jurisdiction for the Appellate Assistant Commissioner to permit the raising of additional grounds in respect of the turnover which was not disputed in the original appeal, filed in the prescribed form and therefore the Tribunal erred in directing the Appellate Assistant Commissioner to decide the assessability of the additional turnover on merits".
2. The order of reference in this case reads as follows :
" In this tax case, the point raised by the assessee is that the Tribunal has erroneously refused to entertain its objection regarding an exemption from assessment of purchase turnover of raw hides and skins amounting to Rs. 8, 97, 014.34. This purchase turnover was included in the assessment, among other amounts, in the total taxable turnover. The assessee appealed against this assessment on 13th June, 1971. In the memorandum of appeal, the assessee did not question the inclusion in the assessment of the purchase turnover of Rs. 8, 97, 014.34. However, the assessee filed an additional ground before the Appellate Assistant Commissioner on 25th August, 1971, in and by which the assessee put forward its objection to the inclusion of the said turnover in the assessment. The Appellate Assistant Commissioner disposed of the appeal by order dated 31st March, 1975. While doing so, he dealt only with the ground raised in the original memorandum of appeal filed before him by the assessee, and completely overlooked the ground raised by the assessee by way of additional ground in respect of the turnover of Rs. 8, 97, 014.34. The assessee carried the matter in further appeal before the Sales Tax Appellate Tribunal. Before the Tribunal, the assessee raised its objection to the inclusion of the turnover of Rs. 8, 97, 014.34. The Tribunal, however, refused to entertain this ground. Describing the additional ground as a supplemental appeal, the Tribunal said it was incompetent. The Tribunal observed that the additional ground filed on 25th August, 1971 was also out of time. They further observed that if this additional ground was regarded as a substantive appeal in itself, that again would be incompetent since against a single assessment order there could be only one appeal. Holding that the additional ground could not be entertained on any account, the Tribunal did not proceed to enter into the merits of the objection raised by the assessee.In this revision, the assessee questions the legality of the order of the Tribunal.
Under the Tamil Nadu General Sales Tax Act, 1959, an assessment can be carried in appeal by an aggrieved assessee under section 31 of the Act. Section 31(2) provides for the form in which the memorandum of appeal should be filed. Section 31(3) lays down that in disposing of an appeal, the Appellate Assistant Commissioner may confirm, reduce, enhance or annual the assessment where what is carried in appeal is an assessment. The Tamil Nadu General Sales Tax Rules, 1959 prescribe not only the form in which the memorandum of appeal should be filed before the Appellate Assistant Commissioner, but also certain other matters connected with the appeal proceedings. Neither section 31 nor the rules make specific provision for an additional ground to be urged by an assessee before the Appellate Assistant Commissioner.
However, as a matter of first matter of first imp
